Keeping your tax records is important if you hope to protect yourself in the event Check this page of an audit or need to provide proof of your earnings to the Internal Revenue Service (IRS). The amount of time you should be holding onto these taxes depends on the type of expense and what the document is recording.
Each record has a period of limitations that allows the IRS to assess additional liability or gives you the opportunity to amend your taxes to claim additional refunds or credits. In most cases, you should be holding onto your docs until the period of limitations for your specific situation has passed.
The limitations period begins on the tax due date. If you file before they are due, your records will be treated as though they were filed on the deadline, which is April 15 of each year for most traditional families but can vary if you pay quarterly. Keeping copies of your filed forms can make it easier to amend the finished forms and prepare future documents.
How long to keep income tax returns and tax documents
The amount of time you should keep specific taxes varies depending on the type of forms in question. Here are some of the recommended time frames for storage:
Records should be kept indefinitely if you file a fraudulent return
Records should be kept for three years from the date of your original return
Keep records for at least two years from the date you paid your return
Maintain records indefinitely if you have not filed a return
Keep employment returns for a minimum of four years after the pay or due date
When you are considering whether to toss or keep specific taxes, it is important to consider the type of form. However, it relates to your returns and whether you might need it in the future if you are audited.
Three years is the general recommendation
The general rule for keeping copies of your tax records is to store them for at least three years. Having a paper trail is the best way to protect yourself if the IRS scrutinizes your financial history. Remember, the IRS typically has up to three years from the date of your filing to audit your return.
Unfortunately, many situations allow the IRS to make inquiries after three years have passed. For this reason, it may be well advised to consult with a professional about your specific situation.
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